North Dakota voters reject measure to abolish property taxes

North Dakota voters on Tuesday soundly rejected a ballot measure that sought to make the oil-rich state the first to abolish property taxes, a move critics said would have undermined local governments and forced an increase in taxes overall.

The measure, which would have required state lawmakers to come up with a way to replace $812 million in lost property tax revenues for 2012 alone, was defeated by a vote of 77.5 percent to 22.5 percent, with 70 percent of precincts reporting.

A varied coalition organized opposition to the measure, including the North Dakota Chamber of Commerce, which said it was looking for "broad based" reform of personal income, corporate and sales taxes as well as property taxes.

"We would like to see all levels of our taxes go down, spread it across all of our tax streams," Jon Godfread, vice president of governmental affairs for the chamber, said in a telephone interview before the polls closed.

Supporters of the proposal called property taxes among the most regressive and argued that North Dakota's booming oil economy has produced low unemployment levels and hefty budget surpluses that would make the transition easier.

"The surplus makes it easy for us to fund whatever revenue might be lost when the measure passes," said Charlene Nelson, chairwoman of the group that proposed the measure.

Nelson said earlier that the group did not expect the measure to be approved by voters, but they would try again next year if lawmakers fail to approve broad-based tax changes.

"We will give them a chance," Nelson said. "My guess is they will be unable, unwilling, incapable of reforming this tax because it really is unfixable."

The measure would have eliminated $812 million in property tax revenue from 2012 and $1.8 billion from the next two-year budget period, according to a nonpartisan legislative analysis.

The measure also would have required North Dakota state legislators to replace lost revenue to cities, counties, townships, school districts and other political subdivisions without specifying how that was to be done.

Moody's had issued a special comment on the measure, saying that if voters were to approve it, local and municipal governments in North Dakota would face significant financial pressure.